Las Vegas-based MGM Resorts International(NYSE:MGM) said on Thursday that it has obtained $5 billion in financing, sending its shares up.
The company launched a tender offer to repay more than $3 billion in existing debt due over the next several years with proceeds from a new $4 billion senior secured credit facility and $1 billion in new unsecured notes.
The debt which MGM Resorts has to repay includes $750 million of 13 percent senior secured notes due 2013, $650 million of 10.375 percent senior secured notes due 2014, $850 million of 11.125 percent senior secured notes due 2017 and $845 million of 9 percent senior secured notes due 2020.
Shares in the company rose $1, or 10 percent, to $10.97 in heavy trading after peaking at $10.99 earlier in the day. Over the past 52 weeks, the company's shares have traded between $8.83 and $14.94.
The announcement was followed by rating firm Standard & Poor's raising its non-investment grade corporate credit rating for the company to "B+" from "B-."
It said that while MGM will still have a high level of debt, the refinancing will lower its interest costs and help generate cash flow that it can use to repay more debt down the road.